Salesforce's AI Agents Pivot Is Already Showing Results

For the quarter ended on October 31st, Salesforce CRM reported that revenue grew 8% YoY to $9.44 billion, surpassing LSEG’s consensus estimate of $9.34 billion.

Net income grew 25% YoY to $1.5 billion. Adjusted earnings of $2.41 per share which came short of LSEG’s estimate of $2.44.

Fiscal fourth quarter guidance

Salesforce guided for current quarter sales between $9.9 billion and $10.10 billion and earnings per share in the range between $2.57 and $2.62.

Salesforce ended 2024 on a strong note as it continues its transformation journey. 

Salesforce CEO Marc Benioff summed up the report as yet another quarter of exceptional financial performance across revenue, margin, cash flow, and cRPO, with the AI system for enterprises built into the Salesforce Platform being at the heart of its groundbreaking transformation. Salesforce’s Agentforce is an example of so-called AI Agent technology, with such advanced chatbots believed to represent the next step after Microosft Corporation MSFT-backed OpenAI’s ChatGPT. The recently launched Agentforce’ AI software platform or so-called agents stand for advanced generative AI tools that can do multistep, complex tasks on a user’s behalf. Benioff described it as AI agents letting humans unite to transform all customer interactions, allowing human capital to be used where it really makes a difference, such as strategic work. Since Microsof-backed OpenAI launched ChatGPT, a wave of innovation followed. Microsoft alone has also invested billions to develop its own AI products, but there is a lot of of execution ahead, just like for Meta Platforms META and Google who also touted their efforts to make their AI assistants more productive. Moreover, Benioff even took a hit at Microsoft, saying that its Microsoft Copilot is overhyped, like all LLM-based generative AI assistants, in his effort to shift the conversation towards AI agents that are becoming increasingly important in the new era that is in the making.

All in all, the better than expected revenue and strong outlook fueled hopes for Salesforces much-hyped artificial intelligence strategy coming to fruition. In addition, Seeking Alpha reported that a survey of chief information officers by KeyBanc showed that IT budgets are poised to increase 3.9% YoY in 2025, which would benefit both Salesforce and Microsoft, among other players. 

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